What is a Term Business Loan?
Business loans are suitable for a wide range of businesses and are generally offered in two types: short-term and long-term business loans. They are written off against home loans, but a little harder to finance.
With a long term loan, you get a lump some of cash upfront to invest in your business and repay with interest over a predetermined time period. This is best for businesses looking to expand that have good credit and strong business revenue.
Short term loans allow for very fast funding so you get a lump sum of cash with a predetermined payment term. Payment is usually made daily, weekly or bi-weekly. The short term loan is best for business with high and consistent sales that are in need of quick unsecured cash to use however you need.
Pros
- After payments are complete, you own the equipment
- Frees up your cashflow
Cons
- May need a down payment if you have a lower credit score
- Equipment might be seized if payments are missed
The Benefits of Business Loans
You can obtain a small business loan from a traditional bank or an alternative financing lender. If you need to make an equipment or inventory purchase, need more working capital, or need a one-time loan to refinance other corporate debt, or if you want to service a certain debt on your small business loan, a small business loan may be the answer.